MMA Business Week: 10/26 – 10/30

October 31, 2009

It wasn’t really a huge week in MMA business, but here are some of the bigger news items of the last few days.

 – Machida needs surgery, out of 108

The bad luck continues for the UFC as they won’t be able to capitalize on the heated controversy that was Machida-Rua I, with an immediate rematch.

Anticipation building for Fedor vs. Rogers on November 7th

CBS/Strikeforce have released a series of promo commercials in the past week in order to help build the fight.

– Legalization moving forward; Rhode Island ready, Massachussets soon

It’s expected that Massachussets will get the final seal of approval from the governor by the end of November.

Lesnar out of UFC 106

The bout has tentatively been rescheduled for UFC 108, but who’s to say when he’ll be back at 100%. Carwin also divulged that he’d been suffering from H1N1 early in the training camp.

UFC 104 Predicted Buyrate: 398,000

Using regression analysis across two variables, MMAPayout.com has predicted a buyrate of 398,000 for the event.

ProElite purchased for $2 million

Stratus Media Group, looking to diversify their holdings, acquired the organization. Time will tell whether they can effectively leverage their own experience to make the organization successful.

MMA Business Week (8/31-9/4)

September 4, 2009

Recapping some of this week’s stories that we didn’t cover for one reason or another.

Payout Perspective:

There are two sides to every story and the latest on the DirecTV-Versus impasse indicates that it’s about more than just fees. DirecTV attempted to move Versus to another tier in its programming, which would have taken Versus off an estimated 6 million homes.

The rhetoric is getting pretty thick with both sides trying to gain some leverage by courting public opinion. DirecTV has argued that Versus is asking for a 20% increase in the fee paid for the channel. Additionally, the provider is defending its position to move Versus to another tier, by claiming that DISH has been able to do the same thing with the network. While Versus claims that they haven’t asked for 20%, and that they’re simply asking for a fee equal to what they’re being paid by other providers. The network is also in the process of trying to rally loyal Versus customers on the DirecTV system in order to pressure the provider to reduce its demands.

It would seem as though DirecTV owns a great deal of leverage, and the situation itself is quite reminiscent of the Time Warner-HDNet debacle of earlier this year when HDNet sought to renegotiate with the cable provider in order to secure a better place in the programming line-up (again the tier issue) and increase its visibility.

Time Warner ended up permanently dropping HDNet on May 31st, citing a need to acquire other HD programming with greater appeal.

Expect the situation to be resolved one way or another within the next month; that’s when a host of Versus’ exclusive programming will kick in and they’re going to want those 14 million viewers on DirecTV.

—-

Dana White announced that BJ Penn vs. Diego Sanchez will headline UFC 107 the same night that Rampage and Rashad are set to settle their growing feud. The card will also feature Frank Mir vs. Cheick Kongo and Thiago Alves vs. Paulo Thiago.

The announcement ended speculation that the title bout would headline a third card in November, slated for some sort of network television audience.

It should also serve as another reminder to MMA fans that an even keel approach to MMA’s growth and expansion is very much necessary; the UFC is always in talks with one network or another, exploring all of its options, and this isn’t the first – or even the second – time that Dana White has indicated a deal was possible only to return empty handed.

—-

The perception of MMA is slowly changing in Brazil according to SI’s Josh Gross.

Brazil is an emerging market economically and ripe with potential as an MMA market considering the plethora of talent that emminates from the country. If local advocates can leverage some of the UFC’s marketing power to help turn the sport’s image around, they could have a new and even better version of the Canadian market on their hands.

—-

Sean Salmon wrote a curious piece for www.MMA Junkie describing what sounded like him giving up so that he wouldn’t be hurt for another fight in the UK later that month.

The MMA media has since jumped all over Salmon. The Ohio State Athletic Commission is investigating a possible suspension. Salmon is also now back peddaling on his article, claiming that what he wrote wasn’t representative of what really happened.

People are pointing to the fact that Salmon was a huge favourite as some sort of proof that he “took a dive” on purpose, but that’s a bit presumptuous. There should be an investigation, he should be suspended, and he does need to turn his life around; however, he also deserves a chance to right his wrongs and conquer his demons.

The particular business perspectives here are numerous:

  • The incident touches on the sport’s legitimacy and the on-going tasking of seeking legalization. It could be something governments and sanctioning bodies point to in order to make the sanctioning road just a little tougher.
  • Salmon’s betting lines underscore the risk of betting on a fight card in a smaller organization. The level of information asymmetry is exceptionally high, the matchmaking is quite suspect, and the smaller events are sometimes regulated and monitored with a lower degree of intensity than a larger event.
  • It also highlights the financial burden that fighters like Salmon face, and the pressure they’re under to fight consistently in order to make money (and, hopefully one day return to the UFC). The money just often isn’t there for fighters to earn a full-time living. Many people will be quick to blame the UFC, but just because Salmon fought in the UFC a few times, doesn’t mean he earned the right to be a millionaire. He could have taken the brand equity he’d established in the world’s premier organization and leveraged that into some significant paydays; instead he seemingly lost his way a little, and is now on the long road back to recovery.

—-

The Fedor vs. Rogers hype has begun with Rogers launching several verbal salvo’s at the former Pride heavyweight champion.

It seems as though every second morning you can open a browser and find another sound bite from Fedor or Rogers discussing the pending November tilt. In response to claims he’s dodging competition, Fedor has stated he’s got nothing to prove. In turn, Rogers has said he’ll catch the “sloppy” Russian with a good shot and knock him out.

Unfortunately, the coverage and interest the event is drawing seems to be limited to that of the MMA media. We’ve yet to really see the major media pick up any of these stories. Strikeforce is going to need to do a better job at involving the mainstream media in the next couple months if they hope to grow beyond just MMA’s hardcore baseline.

—-

The UFC has signed Matt Hughes to a new, multi-fight contract extension per his own website.

Might a rematch with Matt Serra be in the works? Perhaps a better question is, considering the last one, does anyone really want to see another fight between these two?